Limitations Of Cost Notice Obligations Must Be Met

Sep.15.2006

The ASBCA in International Technology Corp. (July 17, 2006), denied a claim for an upward adjustment above the contract's cost limitation because the contractor had inexcusably failed to comply with the Limitation of Cost clause provision requiring advance notice to the government of the projected costs over the limit. The board rejected the contractor's argument that it had to determine the allowability of its subcontractor's costs prior to providing notice, finding that notice is required when a contractor has “reason to believe” there will be a cost increase.